Stock Market Spooked by China and Q4 Earnings

By: PhilStockWorld

Before the US markets opened the Flash China Manufacturing PMI came in at 49.6 in January (versus 50.5 in December), a six-month low. Markets around the world sold off at the unexpected news. The S&P 500 opened at its -0.14% intraday high and sold off to its -1.34% intraday low at 2 PM, when buyer’s apparently sniffed an opportunity. The index closed with a trimmed loss of 0.89%. The ongoing mixed bag of Q4 earnings didn’t help.

Here is a 15-minute look at the holiday-shortened week so far. Today’s dramatic intraday range was a big change from yesterday’s yawner.

The yield on the 10-year note dropped 8 bps to 2.79% and is now well of its 3.04% interim high at the end of 2013.

Here’s a daily chart of the SPY ETF. Today’s opening was the biggest gap down since late August of last year. We also see that daily volume in 2014 has generally been higher on the losing days.

The S&P 500 is now down 1.08% for 2014.

Here is a longer perspective, starting with the all-time high prior to the Great Recession.

For a better sense of how these declines figure into a larger historical context, here’s a long-term view of secular bull and bear markets in the S&P Composite since 1871.

- Phil

www.philstockworld.com

Philip R. Davis is a founder of Phil's Stock World (www.philstockworld.com), a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders. Mr. Davis is a serial entrepreneur, having founded software company Accu-Title, a real estate title insurance software solution, and is also the President of the Delphi Consulting Corp., an M&A consulting firm that helps large and small companies obtain funding and close deals. He was also the founder of Accu-Search, a property data corporation that was sold to DataTrace in 2004 and Personality Plus, a precursor to eHarmony.com. Phil was a former editor of a UMass/Amherst humor magazine and it shows in his writing -- which is filled with colorful commentary along with very specific ideas on stock option purchases (Phil rarely holds actual stocks). Visit: Phil's Stock World (www.philstockworld.com)

© 2014 Copyright  PhilStockWorld - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.